Top tips for first home buyers

There’s a lot to consider before building a first home. From the design of your home to the builder you choose to find the right house and land package, it’s not always a clear-cut process. To help you out, here are some of the important steps to consider on your way:

• Researching builders
• Finance checks
• Government assistance
• Progress payments
• Floor plans and home builders

Becoming a first home buyer is one of the most exciting journeys you’ll experience in life. While it involves making big decisions, it can be a gratifying and creative process. When you start researching your new home, you might like to consider the following tips.

RESEARCH

How to choose the right home builder

The first part of the research might be obvious - choosing a new home builder. This process might take some time given the plentiful options, but rest assured it is time well spent. Some factors to consider when looking for a builder:

Are they transparent and upfront with their pricing? To answer this, look for publically available price lists on their website.

• What type of inclusions do they offer at no extra cost?
• Will they allow you to customise and personalise your home?
• What type of structural warranty do they offer, and do they inspect your home after you've moved in?
• What is their financial stability like?

If you’ve decided to look for homes in Victoria and you’d like an experienced team, Henley has more than 30 years in the business and ticks all the boxes above.

What’s involved in the process?

As a first home buyer, you’re about to embark on an exciting journey so it makes sense to plan, research, study, enquire, and then research some more! Don’t be shy; ask questions every chance you get.

Get to know the finance lingo so you are comfortable with terms like LVR, LMI, offset, comparison rate and holding deposit.

Do your research to find an experienced mortgage broker who specialises in construction lending and can guide you through the finance process to make it an easy and stress-free experience.

Learn about the suburb you want to move into – investigate what infrastructure and developments are planned for the area, look at suburb reports, and more.

Research builders to find the right builder for you. Do they respect your vision? Can they meet your budget? Do they have a great reputation? Are they appropriately licensed?

What sort of home build will you choose?

Have you decided to buy a completed home in a new estate? Or do you want a brand-new home with the option to customise your floorplan and colour selections, perhaps via a house and land package?

A house and land package is a very attractive option for first-time homeowners. Some of the benefits of this approach are the confidence you’ll get working with fixed prices, the inclusion of all site costs and luxury inclusions and guidance through the entire process. When you work with a builder like Henley, you also get to personalise your home, working with our in-house interior designers who will help guide you through the selection process. Our designers provide free, expert support so that you can tailor make your home to fit your needs and your style, and you’ll get to choose from market-leading brands like Dulux and Caesarstone. Plus, you’re welcome to visit the Henley Design Showroom as many times as you like.

A completed home is another great option for taking your first step into the housing market. Henley’s completed homes are a great way to experience the joy of buying an established home that’s never been lived in with all the selections pre-determined by a team of expert interior designers. You also receive the added benefit of the most popular upgrades that you otherwise might have had to pay extra for. Often, these homes are ready to move into now or within 3 – 6 months from when you purchase. You also receive the added benefit of a fixed price contract with no progress payments and only a 5% deposit required.

FINANCE

How are your finances looking?

As you know, saving for your first home requires you to set a budget and stick to it. You need to know how much you require for a deposit and what mortgage repayments you can comfortably manage. Everyone’s situation is different, so make sure to be realistic. First home buyers generally need to save a minimum of 5% of the purchase price of the property they’re interested in. There are many household budget calculators available online to help, and you can find loan calculators on individual bank and finance company websites.

Get your credit report ready and healthy

Getting your finances in order is vital for first home buyers. You need to have a healthy credit report, which is the file of your financial history. Your financial history tells the story of your finances and includes your credit card repayments, how much debt you hold, and when you’ve opened and closed each of your accounts. Some tips for building a healthy credit report include saving a percentage of your salary, avoiding ‘buy now, pay later’ schemes such as Afterpay, sticking to a sensible budget and keeping an eye on your credit score. As we explain below, it’s worthwhile to find an experienced broker to join your support crew, so that you have someone you can trust to keep your finances on track to home ownership.

A mortgage broker will provide expert advice on borrowing a home loan. They’ll help you cut through the noise and find you a competitive and authentic home loan deal. They will also help you:

Understand your borrowing potential

Work out your property goals and help you achieve them.

Discover options that suit your unique circumstances.

Understand the different loan products (for example a variable or fixed interest rate), their costs and the features they have (products like offsets or redraw facilities).

Once you have decided on a loan deal, your broker will guide you through the legal work and loan application process.

Remember: only deal with a licensed company or person by checking ASIC’s online register.

GOVERNMENT ASSISTANCE: What assistance is available to you?

There are many different financial grants and schemes available in Australia to help first-time buyers enter the market. To get you started, here is a snapshot of the grants currently on offer:

• First Home Owners Grant (FHOG)
• First Home Loan Deposit Scheme
• First Home Loan Super Saver Scheme
• Family Home Guarantee Scheme
• Stamp Duty Concessions, where relevant

PROGRESS PAYMENTS

What are the payment stages?

During a new home build, you will have to make scheduled payments at key milestones. These payments are in line with the Housing Industry Association’s recommended payment schedule. An experienced and transparent builder will be able to step you through the build process well before it begins, which helps make for a more organised and confident journey. For example, these are the six payment stages when building with Henley. At each stage, you will pay a percentage of the total project cost.

Deposit (5%) > Base stage (10%) > Frame stage (15%) > Lock-up stage (35%) > Fixing stage (25%) > Completion stage (10%)